Aviation was a sector that had silver linings

- A Monitor Report 01 Oct, 2018

M Mofizur Rahman, Managing Director, NOVOAIR

Dhaka : Aviation is a sector that had silver linings, with all the potentials to grow but that cannot be expected anymore.

There is a very strong political will and directives from the very highest seat of government for development of aviation in the country, but a lacklustre move and negative attitude to turn the political will in to action persists down the chain.

M Mofizur Rahman, Managing Director, NOVOAIR said this while talking to The Bangladesh Monitor at his office in the city recently.

Mofizur Rahman said, there has been no paradigm shift. We continue to be where we were.

Besides policy support, we need a positive attitude from the policymakers and the bureaucracy for much needed development of aviation sector, sadly enough, which is absent.

He brought up a burning example that after a very long persuasion from the sector and a detailed study by MOCAT, a request was send to Ministry of Finance for reduction of very high level of airport charges that exists here compared to our neighboring countries. But it is learnt that same has been volleyed back to CAAB who does not have the financial authority to reduce the charges.

In Bangladesh we have a tendency of centralising everything in every sphere instead of delegating authority. One agency steps into others areana.

Here CAAB is putting on three hats alone like a regulator, a service provider as custodian of airports and recommending aviation tariff to the government. There exists a clash of interest for the same reason. When every stake holder suffer in terms of service in the airports, same can not be redressed as it points the finger to the regulator. This dual rather tripple role must be segregated. Like elsewhere function of regulator should be vested with CAAB, separate body should be formed for airports and committee to formulate tariff. On the other hand MOCAT also should allow CAAB to function as per the established charter without interfering in everything.

Now they (CAAB) are laying conditions for GSAs - how many square feet our offices should be, how many staff we are to have.

While CAAB can not efficiently discharge its core duty of regulating due lack of required manpower, it is surprising and difficult to understand that why it (CAAB) would take the responsibility of regulating GSA functions. It is neither equipped nor capable to do so due to reason aforesaid. While it is a business between principal airline and GSA, it is not understood why CAAB will formulate that. In a recently published policy CAAB undertook the responsibility of an arbitrator where there is formal arbitration body and court to settle the dispute. I don't know if stakeholders were consulted before making such policy. Thinking of inclusive approach is just not there.

Challenges

Mofizur Rahman opined that predatory pricing by the national carrier was one of the biggest challenges. Giving an example in this regard, he said, US had stopped the practice as the giant airlines had killed about 60 new entrants. India is adopting the same practice (stopping predatory pricing). The same should be done here, he felt.

He said he was operating on the most economic platform - with ATRs. "I am still losing money. I can feel others are doing the same (bleeding)."

Price

Mofizur Rahman said, suppose I give a "cutthroat price" to Cox's Bazar. It may be affordable for the passengers but not for the airlines.

Mofizur Rahman said, private airlines have to pay 39 per cent more in terms of fuel price in domestic sector. It is allegedly due to VAT.

He said he was not aware of such a high slab of VAT. He said he also found no merit in the argument that the international airlines will not pick up fuel if the price was not kept lower for them. The NOVOAIR Managing Director opined that ending fuel supply monopoly could be a solution. Allow competition and you will get a better service.

In airports in India and Myanmar, there was more than one aviation fuel supplier, he said.

He acknowledged that NOVOAIR's fleet of six ATRs could not be fully utilised for shortage of pilots. We are training pilots, while the national carrier is taking then away, whereas is should have been the other way round.

Airlines are also at a disadvantageous position regarding landing, parking and other charges. We have to pay seven times higher charges once our aircraft is engaged in international flights.

Replying to a query, he said with so many airlines operating on Dhaka-Kolkata sector, there was no scope of increasing yield. This will remain at this level. It can be sustainable to Indian carriers, but not to us as they provide domestic connections across India, whereas we are serving point to point.

Contrasting scenario

Mofizur Rahman painted a contrasting aviation scenario in India. He attended, as guest of IATA, the International Aviation Summit in New Delhi, co-hosted by the Indian Ministry of Civil Aviation (MoCA), the Airports Authority India (AAI) and IATA. The joint summit was held to commemorate the milestone of 50-straight months of double digit domestic growth for Indian aviation.

Mofizur Rahman said, he found the Minister for aviation, State Minister, Secretary - the ministers and bureaucrats - all were very knowledgeable, more so than even the professionals.

Everything was in their fingertips -where the new airports are opening, what is their throughput, how many passengers flew from each of the airports, etc.

Neither the ministers, nor bureaucrats took any credit, rather they praised the airlines and the four autonomous agencies DGCA, Indian Airport Authority, BCAS and Commission for Civil Aviation Tariff for the growth.

He said, by providing connectivity to remote regions through Urey Deshke Aam Nagorik, popularly known as UDAN, not only tremendous economic activity had been generated in the backward regions, the government of India is also getting back a return that is several times the subsidy it had originally provided.

Mofizur Rahman concluded painting a dismal picture about country's private airlines, saying, you can hold up hope for a certain time. Then you lose hope. Unless there is a realisation among the policymakers and bureaucrats to bolster the aviation sector, the country will become a foreign carriers' market.